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Challenge to order of partial waiver of pre-deposit under Section 35F of Central Excise Act, 1944. Analysis: The petitioner challenged an order by the Commissioner (Appeals) directing a partial waiver of the pre-deposit condition under Section 35F of the Central Excise Act, 1944. The petitioner claimed Modvat credit for high-speed diesel oil used in electricity production for its factory manufacturing synthetic filament yarn, as allowed under Rule 57B of the Central Excise Rules. An amendment to Rule 57B clarified that inputs referred only to specified items. The Asstt. Commissioner disallowed Modvat credit and imposed a penalty, leading to the appeal before the Commissioner. The Commissioner partially waived the pre-deposit condition, noting the penalty issue revolved around a Rule interpretation question, and directed a deposit of Rs. 22.88 lacs. The petitioner contended the pre-deposit requirement was unjustified, given the strength of their case. The matter involved a first appeal pending before the Tribunal, where the petitioner claimed compliance with Rule 57B for Modvat credit. The dispute centered on whether the petitioner could avail Modvat credit for HSD oil used in electricity production. The petitioner did not claim credit post the Rule amendment. The petitioner argued non-availment of credit for a specific period. In light of these circumstances, the Court found it appropriate to require a deposit of Rs. 5 lacs under Section 35F, waiving the pre-deposit condition for the balance amount. In conclusion, the Court allowed the writ petition, modifying the Commissioner's order. The petitioner was directed to deposit Rs. 5 lacs within 15 days, with the pre-deposit condition for the remaining amount waived for appeal purposes. The Court clarified that its observations would not bind the Commissioner during the appeal's merit consideration.
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